Another Big Four bank has reported a rise in full-year earnings to more than $7 billion but analysts called ANZ's profit disappointing and environmental groups found its climate commitments wanting.
Australia's most internationally focused retail bank on Monday posted a cash profit of $7.4 billion for fiscal 2023, up 14 per cent from the $6.5 billion it made in 2021/22 but slightly under consensus analyst expectations. ANZ's statutory net profit was flat at $7.1 billion.
"This is a strong annual result, with record revenue and cash profit following several years of transformation," chief executive Shayne Elliott said in a statement.
The market seemed to disagree, with ANZ shares at down 3.2 per cent to $24.65 at mid-afternoon, on a day when CBA and NAB were up and Westpac was only down slightly.
E&P Capital analyst Azib Khan called the result a negative, with 2023/24 consensus downgrades likely.
There are concern that ANZ's relatively aggressive growth in Australian home lending is pressuring its net interest margin, Mr Khan said, which was under expectations at 1.65 per cent.
Mr Elliot said ANZ had strengthened its balance sheet and now has provisions for potential credit losses at higher than prior to the COVID-19 pandemic.
"This is critical as we enter a period of continued high interest rates, rising costs and geopolitical tensions," he said.
Just 2,000 of ANZ's one million mortgage customers are in hardship, a sign that most households are "muddling through pretty well," Mr Elliot said in a video interview with the bank's internal Bluenotes publication.
"Now, it's dreadful for the 2,000 and we'll do everything we can to help them through," he said. "But in the scheme of things, it's relatively modest. And so that speaks to the strength of the economy, the fact that people have been able to work through."
The percentage of ANZ's Australian customers that are 90 days or more behind on their home loan or credit card payments has been ticking up this year but remains well below the levels seen before the COVID-19 pandemic.
Two environmental groups were critical of ANZ's policy update on its climate commitments, saying they lagged those of the other three major banks in several respects, such as still allowing financing to coal, oil and gas companies via bonds.
"Rather than being a leader and aligning with global best practice, ANZ has chosen to lag behind," said Jonathan Moylan, the Australian Conservation Foundation's corporate campaigner.
Kyle Roberston, banks campaigner with Market Forces, called ANZ's policy update the weakest of the Big Four banks on climate this year.
"ANZ will continue propping up oil and gas expansion by companies for an extra nine months, until October 2025, before these polluters have to disclose emissions reduction plans in line with global climate goals."
The 89-page climate report says ANZ has been engaging with 100 of its largest carbon emitting customers since 2021 and encouraging them to strengthen their low-carbon transition plans.
In other business, ANZ said its ANZ Plus digital banking platform had grown to over 500,000 customers and over $10 billion in deposits since launching 18 months ago.
Mr Elliot said ANZ Plus, which lacks physical branches, is operating at about a 25 per cent lower cost than its more traditional bank, and that would improve as it scales.
Mr Elliot said it expects to hear in February from the Australian Competition Tribunal on its bid to acquire Suncorp Bank, a transaction the Australian Competition and Consumer Commission has sought to block.
Last week, National Australia Bank reported a rise in cash earnings of $7.7 billion and a net profit of $7.4 billion for fiscal 2023, while Westpac grew its net profit by 26 per cent to $7.2 billion.
ANZ announced a final dividend per share of 94 cents, 56 per cent franked, taking the bank's total payout for the year to $1.75 per share, up from $1.46 last year.
Australian Associated Press
